Top Hedge Fund Executives Accused of Illegal Insider Trading

A sophisticated network of hedge fund executives, analysts, and a portfolio manager have been charged by the U.S. government of conspiring to execute the largest insider trader scheme ever. The fraud involved high-level executives at “some of the largest and most sophisticated hedge funds in the country” and resulted in $78 million in illegal profits, according to government enforcers.

According to U.S. Attorney Preet Bharara, Anthony Chiasson, co-founder of hedge fund Level Global Investors, has a primary role in the fraud, which resulted in illegal profits of $78 million realized on trades of Dell and Nvidia Corp. Using insider tips received from Dell employees about Dell’s disappointing earnings, Chiasson and people in his network earned a record $53 million in profit for shorting Dell’s stock. The Department of Justice’s probe also uncovered $15.7 million profit in illegal trades of Nvidia Corp. based on insider information.

The fraud was discovered during a 4-year-old probe dubbed Operation Perfect Hedge according to FBI Assistant Director-in-Charge Janice K. Fedarcyk. “If you are engaged in insider trading, what distinguishes you from the dozens who have been charged is not that you haven’t been caught; it’s that you haven’t been caught yet,” Fedarcyk warned.

This entry was posted on Tuesday, February 14th, 2012 at 7:04 pm and is filed under WT Blog.
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